CORRE (TSX-V:CVR, OTCQX: CRVYF): Kuwait set to invite bids for clean-up

“As published in Upstream, January 14th weekly edition”

Kuwait Oil Company (KOC) will invite bids imminently for about $200 million-worth of soil remediation work to be followed later this year by even bigger tenders as it embarks on a multi-billion dollar clean-up of the oil lakes left by Saddam Hussein’s army in 1991.

Industry sources said the effort will involve the biggest ever clean-up operation in the world to put right the damage caused when the retreating Iraqi troops torched Kuwait’s oilfields.

The massive cleaning-up of the lakes would cost about $3.5 billion, paid for out of United Nations war reparation funds. However, significant amounts of crude could be recovered as part of the operation, according to some experts.

KOC has been preparing for the first set of soil remediation work, separate from the clearing up of the oil lakes, since early 2009 and is now ready to issue the tenders later this month or in early February, said a source.

This initial soil remediation job, which is relatively routine and worth nearly $200 million, has been divided into three tender packages of approximately equal size.

Six different remedial operations will be required in each tender package.

More than a dozen companies are on a list pre-qualified by KOC for the project.

Some of the bidders for the three packages are also on a bigger list of 24 pre-qualified com­panies waiting for a tender later in the year for the much more ambitious oil lakes clear-up operation.

“Tenders (for the oil lakes created in 1991) will probably be issued in August,” a source said.

This unprecedented operation could last decades and contract awards are likely to be staggered.

A first abortive attempt at an international tender was held earlier in the decade.

KOC started moving on the scheme after the UN transferred responsibility to it nearly two decades after the first Gulf War ­between US-led forces and Iraq.

Iraqi troops were forced to withdraw to Iraq, but they torched an estimated 800 oil wells as they retreated.

It took nine months to put out all the fires and stop the spillages.

Estimates say nearly 5 million barrels of oil per day were lost, more than twice Kuwait’s production at the time.

Sources said that up to 10% of the oil in the lakes could be recovered in the clean-up process.

The lakes, which number several thousand, were formed by the seawater used in quenching the fires, and contain large quantities of salt.

The lakes restrict access to the country’s producing oilfields, also complicating drilling and exploration activity.

Most of the companies bidding for the clean-up operation are specialised international firms including Arcadis GMI of the UK and SAR, a Norwegian-based ­operation. Saipem of Italy is also hoping to take part in clearing up the lakes, as are a host of mainly European and American specialists such as Aecom, Bauer, Environmental Resources Management, Tetra Tech and Water & Soil Remediation.

SAR, a venture of SAR and Can­adian Oil Recovery & Remediation Enterprises (CORRE), ­appears to have taken a head start by building a pilot plant in ­Kuwait.

The venture also has Saudi participation through TG Engineering, which has a stake in CORRE.

The pilot plant, using CORRE’s proprietary ARES 1 soil washing and oil recovery technology, has a capacity of 15 tonnes per hour, expandable to 40 tonnes.

Some of the other bidders will also be using the technology under licence.

Under ideal conditions, such a plant could handle about a million tonnes over three years, but given the vast amounts of soil over more than 100 square kilometres and up to two metres deep that needs cleaning up, it would take many such plants at least 10 to 20 years to complete the job.

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